Jiangsu Expressway (HKG:177) Has Announced That It Will Be Increasing Its Dividend To CN¥0.5153

Jiangsu Expressway Company Limited (HKG:177) will increase its dividend from last year's comparable payment on the 26th of July to CN¥0.5153. Based on this payment, the dividend yield for the company will be 6.1%, which is fairly typical for the industry.

View our latest analysis for Jiangsu Expressway

Jiangsu Expressway's Payment Has Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time. The last dividend was quite easily covered by Jiangsu Expressway's earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

The next year is set to see EPS grow by 21.2%. If the dividend continues along recent trends, we estimate the payout ratio will be 49%, which is in the range that makes us comfortable with the sustainability of the dividend.

Jiangsu Expressway Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was CN¥0.38, compared to the most recent full-year payment of CN¥0.47. This implies that the company grew its distributions at a yearly rate of about 2.1% over that duration. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

Jiangsu Expressway May Find It Hard To Grow The Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, Jiangsu Expressway's EPS was effectively flat over the past five years, which could stop the company from paying more every year. Jiangsu Expressway is struggling to find viable investments, so it is returning more to shareholders. This isn't necessarily bad, but we wouldn't expect rapid dividend growth in the future.

We Really Like Jiangsu Expressway's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Jiangsu Expressway that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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